CCR offering lenders more holistic view of customers

Recent research has shown that consumers’ more complete credit profiles are helping lenders better manage risk, following Australia’s shift to comprehensive credit reporting.

The two studies conducted by Veda, the largest credit reference agency in Australia and New Zealand, found that more than 930,000 people who may have previously been financially excluded under negative reporting now have a credit profile after Australia’s move to comprehensive credit reporting (CCR).

Veda highlighted that more complete credit profiles are proven to aid Australians in accessing credit and help lenders better manage risk.

Mike Cutter, Veda’s executive general manager of credit risk and advisory services, commented: “The insights that come out of Veda’s consumer bureau are invaluable to lenders and financial institutions, because they offer a more holistic view of their current and prospective customers, what they want and how best to build a relationship with them.”

Veda’s research highlighted that 21 per cent of Australians with CCR data loaded have more than one lending relationship, and thus lenders are able to understand the risk profile of their customers at other financial institutions.

“CCR data on who is, or has recently been, in arrears and their behaviour once they fell behind in their payments, gives lenders advanced warning of who may recover versus who will likely proceed to default. This allows for a level of proactive account management that simply isn’t achievable without CCR data,” Mr Cutter said.

“By combining the emerging CCR data with Veda’s existing wealth of insights on credit active Australians, we can provide lenders with the most complete and dynamically updated picture of a person’s financial situation,” he added.